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Sunday, 10 July 2016

These are the times for extreme views. These are times when people choose to let their fingers do the walking on their keypads without putting the brain into gear. These are times when important Supreme Court decisions are ridiculed as judicial overreach without even first taking the pains to read them or understand the broader import. Or else how could anyone justify the sharp reactions to the Supreme Court’s verdict on fake encounters in Manipur?

The past many years have seen extreme comments against Human Rights activists by those claiming to be patriots and also similar remarks against the security forces by the other side as if our Armed Forces are some kind of heartless mercenaries. How I wish proponents of both views could understand each other and fill up the space which is unfortunately lying empty in our discourse today! I would go to the extent of saying that both views act as a check and a counter-balance, and holistically viewed, are not opposite but rather complement one another and ensure that neither has a free run. That is what a democracy with a rule of law is all about.

So does the Supreme Court decision indict the Armed Forces or tie their hands? Not at all.

The decision merely reiterates the law that already exists and reminds us that semblance of balance or respect for human life (or Human Rights) should not be lost sight of, even in such extraordinary situations.

SC IS AGAINST FAKE ENCOUNTERS NOT REAL OPERATIONS

What people need to realise is that the decision comes down heavily upon ‘fake’ and staged encounters and not real operations. Those making irresponsible comments in the garb of support for Armed Forces should understand that the Armed Forces themselves consider fake encounters the greatest form of cowardice and hence would go all out to punish those who are actually found involved in such crimes or for that matter in other proved Human Rights violations.

PRAISE FOR THE ARMY’S APPROACH

What commentators have also failed to realise is that the Supreme Court has taken note of the “Ten Commandments” issued by the Chief of the Army Staff for operations and has praised the same and has in fact recorded that “nothing can better elucidate how the security forces are expected to act in Manipur.” The Commandments lay emphasis on compassion, integrity, minimum force, moral strength, professionalism anddharma. If there are people, including on TV panels and social media, who want the Army to be ruthless, then sorry to burst your bubble- that is not the ethos of the Army and such approach goes against the very grain of the same Commandments. The Army is a ‘defence’ service of protectors not an ‘offence’ force of aggressors and the Army believes in upholding Human Rights to the hilt and those found violating them are punished and those wrongly accused of violating them are protected.

ARMED FORCES PERFORMING AN UNPLEASANT TASK AND A FUNCTION MEANT TO BE PERFORMED BY CIVIL ADMINISTRATION

Another aspect that the Supreme Court has rightly brought out is that the Central forces are performing a task that they are actually not meant to perform and such situations are ones which are meant to be handled by the civil administration. It is not an ordinary situation and the Apex Court has actually indicated that deployment of the Armed Forces for internal disturbances is not of their own volition and has frowned upon their prolonged deployment and that the State has not been able to restore normalcy thereby requiring their deployment. While this may sound harsh, itis the bitter truth. The Armed Forces are not performing a pleasant task and it is not that they chose the same.

ASPERSIONS HAVE NOT BEEN CAST ON THE ARMED FORCES

The Supreme Court has also emphasized that by no stretch of imagination could it be deemed to be casting aspersions on the Armed Forces. The Supreme Court has reiterated that personnel of the Armed Forces are not immune to the judicial process, a fact that the Armed Forces themselves fully recognize. Also, if there is confidence about the lack of wrongdoing, there should be no resistance to any inquiry into any allegation and the Supreme Court has also not reached any conclusion about veracity of all allegations and has only focussed upon investigation and due process of law.

Beyond the extreme narrative, it would be in national interest if individuals and organisations with supposedly contrary views try to understand all facets of this vexed issue devoid of political polarization and view each other with respect and attempt to find a meeting ground rather than indulge in shrieking matches on electronic and social media. It also must be understood that the Armed Forces vouch for protection of Human Rights as well as the rule of law and shall ensure that violators face (a fair) trial, but at the same time, shall also strongly stand behind their troops wrongly accused of violations due to political considerations.

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Major Navdeep Singh is a practicing Advocate at the Punjab & Haryana High Court. He was the founding President of the Armed Forces Tribunal Bar Association at Chandigarh. He is a Member of the International Society for Military Law and the Law of War at Brussels.

New Delhi: The central government employees' unions are trying to douse all speculation and rumours whether the 7th Pay Commission will be implemented or not, saying that notification towards implementation of the Pay Commission will be issued early next week. The government's flip flop in accepting the employees demand and further setting up a high level committee to look into their demands, has created confusion among central government employees whether or not the 7th Pay Commission will be implemented soon. “There should not be any doubt that salary for the month of July onward will be based on 7th CPC recommendations approved by the government on 29th June, 2016 with only change that, all the allowances, as admissible at present, will continue till report of various committees set up for different purposes are finalized. Gazette Notification for the same is expected today or early next week", said Shiv Gopal Mishra, Convenor, of National Joint Council of Action (NJCA) in a blog.

National Joint Council of Action is an umbrella body of 33 lakh central government employees including Railways, Defence, and other central government unions. Mishra had earlier said that NJCA will put forth its demands to government very strongly and hopes positive outcome from the negotiations. He reiterated that the minimum wages recommended by 7th Pay Commission were not acceptable to the government employees and hopes that the high level committee, which government will set up to look into raising minimum salary, would do the needful in this regard in stipulated time frame i.e. four months.

Just like the issues of Salary hike, Fitment formula or parity of Pension, the issue of NPS is common to all Central Govt. Departments. In spite of that, this issue appears to be less highlighted. I represent a unit where 80% of the employees belong to NPS and all of us are aware of the pros & cons of the scheme and we are really concerned about our future

Thanks for your concern. The problem of NPS employees are well taken care of by the NJCA. Please see the Press Statement issued by NJCA on 6th July 2016 after taking the decision to defer the strike which is published in confederation website. The last paragraph reads as follows——- “The NJCA particularly notes that the Govt. has set up a separate committee for reviewing the New Pension Scheme, which has been a matter of concern to all employees and workers who are recruited to Govt. services after 01.01.2004.” Please also see the para -12 of the Press Communique issued by the Govt. through Press Information Bureau immediately after the Cabinet decision on 29th June 2016 which reads as ——— “Para-12— The Cabinet also decided to constitute a separate committee to suggest measures for streamlining the implementation of New Pension System (NPS)”. Cabinet decision is taken as it is one of the important demand of the Charter of demands of NJCA submitted to Govt. NJCA shall take follow up action on this particular demand as all of us are very much concerned about this important demand. This demand is directly linked to the policy of the NDA Govt. as all of you are aware that it is the previous NDA Govt. which took a Cabinet decision in 2003 to implement New Contributory Pension Scheme to Central Govt. Employees from 01.01.2004.

1. What is the New Pension System (NPS)?

The NPS is a new contributory pension scheme introduced by the Central Government for employees joined in Government Service on or after 1.1.2004. During the year 2009, the NPS was kept open for public.

2. Who is covered by the NPS?

a. Employees who have joined central government service on or after 01 January 2004 including Railways, Posts, Telecommunication or Armed Forces (Civil), Autonomous Body, Grant-in-Aid Institution, Union Territory or any other undertaking whose employees were eligible to a pension from the Consolidated Fund of India., earlier.

b. This contribution pension scheme is also open to any Indian citizen between the age of 18 and 55.

3. I am covered by the NPS. Can I contribute to the GPF?

No. The General Provident Fund ( Central Service) Rules, 1960 is not applicable for employees covered by NPS.

4. I Am covered by the NPS. Am I eligible to Gratuity?

No. You will not be eligible to Gratuity.

5. How does the NPS work ?

When you join Government service, you will be allotted a unique Personal Pension Account Number (PPAN). This unique account number will remain the same for the rest of your life. You will be able to use this account from any location and also if you change your job. The PPAN will provide you with two personal accounts:

1. A mandatory Tier-I pension account, and

2. A voluntary Tier-II savings account.

6. What is the difference between Tier-I and Tier-II accounts?

1. Tier-I account: You will have to contribute 10% of your pay in pay band + grade pay + DA into your Tier-I (pension) account on a mandatory basis every month. You will not be allowed to withdraw your savings from this account till you retire at age 60. Your monthly contributions and your savings in this account, subject to a ceiling to be decided by the government, will be exempt from income tax. These savings will only be taxed when you withdraw them at retirement.

2. Tier-II account: This is simply a voluntary savings facility for you. Your contributions and savings in this account will not enjoy any tax advantages. But you will be free to withdraw your savings from this account whenever you wish.

7. How will I contribute to my Tier-I (pension) account?

Every month, the government will deduct 10% of your salary (10% of pay in pay band + grade pay + DA) and automatically transfer this amount to your Tier-I account in your name.

8. Will the Government contribute anything to my Tier-I (pension) account?

Yes. As your employer, the Government will match your contribution (10% of pay in pay band + grade pay + DA) and transfer this amount also to your Tier-I account in your name.

9. Can I contribute more than 10% into my Tier-I account?

Yes. You will be permitted to contribute more than the mandated 10% of pay in pay band + grade pay + DA into your Tier-I account – subject to any ceiling that may be decided by the Government.

10. Will the Government also contribute more than 10% into my Tier-I account?

No. The contribution of the Government will be limited to 10% of your pay in pay band + grade pay + DA.

11. What will happen if I am transferred to another city?

The PPAN number will stay the same and you will be able to use the same account.

12. If I leave Government service before I retire will the Government continue to contribute to my Tier-I account?

No. The 10% contribution by the Government will stop when you leave Government service. However, your savings in your Tier-I and Tier-II accounts will stay in your name and you will be able to continue using these accounts to save for your retirement.

13. What if I die or become permanently disabled during my service?

Additional Relief on death/disability of Government servants covered by the NPS(New Pension Scheme) recruited on or after 1.1.2004 has been discussed in this Office Memorandum No.38/41/06/P&PW(A) Dated 5th May, 2009

14. How will the money be invested?

The money you invest in NPS will be managed by professional fund managers. Currently, you have the choice of picking up one of the following six fund managers: ICICI Prudential Pension Management, IDFC Pension Fund Management, Kotak Mahindra Pension Fund, Reliance Capital Pension Fund, SBI Pension Funds, and UTI Retirement Solutions. In addition to this there are three schemes for which you have to opt.

Scheme A This scheme will invest mainly in Government bonds

Scheme B This scheme will invest mainly in corporate bonds and partly in equity and government bonds

Scheme C This scheme will invest mainly in equity and partly in government bonds and corporate bonds.

15. Can I switch fund managers if I am not happy with my current fund manager?

Yes, you can switch fund managers. PFRDA, the pension fund regulator, will declare the value of your investment every year in April. At that point of time, if you are not satisfied with the performance of your fund manager, you can switch to another fund manager between May 1 and May 15.

16. What are the charges?

This is where NPS wins hands down against all other modes of creating a corpus to generate income after retirement. The fund management charge of NPS is 0.0009% of the value of the investment, every year. In comparison, pension plans of insurance companies charge 0.75-1.75% as fund management charge, which is 800-2000 times higher. The other expenses charged are also very reasonable.

17. I am covered by the NPS. Do the old Pension Rules apply to me?

No. The Central Civil Service Pension Rules (1972) will not be applicable to you.

18. Who will be responsible for the NPS and for protecting my interests?

The Government has set up a new dedicated regulatory authority known as Pension Fund Regulatory and Development Authority (PFRDA). The PFRDA will be responsible for the NPS and for protecting your interests in the NPS in consultation with Ministry of Finance.

19. Who in the Government will issue me a PPAN account and be responsible for the deductions?

When you join Government service, your Drawing and Disbursement Officer (DDO) will instruct you to fill out a NPS form. You will be required to provide your full professional and personal details including details of your nominee in this form. The DDO will issue you the PPAN number(PRAN) and will also be responsible for all administrative matters related to your NPS accounts including deduction of your contributions, transferring your contributions and the matching contribution of the Government to your Tier-I pension account.

20. What will happen to my contributions to my Tier-I account?

Your monthly contributions, and the matching contributions by the Government into your Tier-I account, will be transferred by the Government in your name to a Pension Fund Manager (PFM). The PFM will invest your contributions on your behalf. In this way, your savings will appreciate and grow over time.

21. Will I be permitted to select more than one Pension Fund Manager to manage my savings?

Yes. If you wish, you will be able to spread your savings across multiple PFMs – where a part of your savings are managed by 2 or more PFMs.

22. Am I guaranteed a certain rate of return?

No return is guaranteed as it is in case of EPF and PPF. The amount of money you make is dependant on how well the fund managers chosen by you perform. But, the extremely low charges in NPS sure give it an edge over the the pension plans of insurance companies.

23. Can I contribute more than 10 into my Tier-I account?

Yes. You will be permitted to contribute more than the mandated 10% of Basic+DA+DP into your Tier-I account – subject to any ceiling that may be decided by the Government.

24. Can I withdraw money from the account?

The NPS offers two accounts: tier I and tier II. Currently only tier I account is available. This is a non-withdrawable account and investments in this keep accumulating till you turn 60. Withdrawal is allowed only in case of death, critical illness or if you are building or buying your first house. In case of death the nominee can get 100% of NPS wealth in a lump sum. He can however continue with the NPS in case he wishes to.

25. What will happen to my savings in the Tier-I account when I retire?

You will be able to withdraw 60% of your savings as a lump sum when you retire. You will be required to use the balance 40% of your savings to purchase an annuity scheme from a life insurance company of your choice. The life insurance company will pay you a monthly pension for the rest of your life.

26. Can I use more than 40% of my savings to purchase the annuity?

Yes. You can use more than 40% of your savings to purchase annuity.

27. What will happen to my savings if I decide to retire before age 60?

You will be required to use 80% of your savings in your Tier-I account to purchase the annuity. You will be able to withdraw the balance 20% of your savings as a lumpsum. The other option is , you can continue to invest in NPS on monthly basis and then purchase annuity using 40% of your savings at the age of 60.

28. Will the annuity also provide a family (survivor) pension?

Yes. You will have an option of selecting an annuity which will pay a survivor pension to your spouse.

29. What will happen to my savings in the Tier-I account when I retire?

You will be able to withdraw 60% of your savings as a lumpsum when you retire. You will be required to use the balance 40% of your savings to purchase an annuity scheme from a life insurance company of your choice. The life insurance company will pay you a monthly pension for the rest of your life.

30. What happens at retirement?

NPS by default sets the retirement age at 60. Once you attain that age, you can use the money that has accumulated to generate a regular pension for yourself. In order to do this, you have to compulsorily buy immediate annuity from a life insurance company with 40% of the money that has accumulated. As explained at the beginning, buying an immediate annuity will assure a regular payment for you. Since a minimum of 40% needs to be used to buy an immediate annuity, a maximum of 60% of the money accumulated can be withdrawn. However, unlike other tax-saving instruments like Public Provident Fund (PPF) and Employees’ Provident Fund (EPF), wherein the amount at maturity is tax-free, in case of NPS this amount is taxable.

31. Whether a retiring Government servant is entitled for leave encashment after retirement under the NPS?

The benefit of encashment of leave salary is not a part of the retirement benefits admissible under Central Civil Services (Pension) Rules, 1972. It is payable in terms of CCS (Leave) Rules which will continue to be applicable to the government servants who join the government service on after 1-1-2004. Therefore, the benefit of encashment of leave salary payable to the governments/to their families on account of retirement/death will be admissible.

32. Why is it mandatory to use 40% of pension wealth to purchase the annuity at the time of the exit (i.e. after the age of 60 years) from NPS?

This provision has been made in the New Pension Scheme with an intention that the retired government servants should get regular monthly income during their retired life.

33. Whether any minimum age or minimum service is required to quit from Tier-I?

Exit from Tier-I can only take place when an inpidual leaves Government service.

34. Whether Dearness Pay is counted as basic pay for recovery of 10% for Tier-I?

As per the New Pension Scheme, the total Dearness Allowance is to be taken into account for working out the contributions to Tier-I. Subsequently, a part of the “Dearness Allowance” has been treated as Dearness Pay. Therefore, this should also be reckoned for the purpose of contributions.

35. Whether contribution towards Tier-I from arrears of DA is to be deducted?

Yes. Since the contribution is to be worked out at 10% of (Pay+ DP+DA), it needs to be revised whenever there is any change in these elements.

36. Who will calculate the interest PAO or CPAO?

The PAO should calculate the interest.

37. What happens if an employee gets transferred during the month? Which office will make deduction of Contribution?

As in the case of other recoveries, the recovery of contributions towards New Pension Scheme for the full month (both inpidual and government) will be made by the office who will draw salary for the maximum period.

38. Whether NPA payable to medical officers will count towards ‘Pay’ for the purpose of working out contributions to NPS?

Yes. Ministry of Health & Family Welfare has clarified vide their O.M. no. A45012/11/97-CHS.V dated 7-4-98 that the Non-Practicing Allowance shall count as ‘pay’ for all service benefits. Therefore, this will be taken into account for working out the contribution towards the New Pension Scheme.

39. Whether a government servant who was already in service prior to 1.1.2004, if appointed in a different post under the Government of India, will be governed by the CCS (Pension) Rules or NPS?

In cases where Government servants apply for posts in the same or other departments and on selection they are asked to render technical resignation, the past services are counted towards pension under CCS (Pension) Rules, 1972. Since the Government servant had originally joined government service prior to 1-1-2004, he should be covered under the CCS (Pension) Rules, 1972.

40. Will I get a tax deduction for the investment?

Yes, under Section 80CCD of the Income Tax Act investments of up to Rs 1 lakh in the NPS can be claimed as tax deductions. Readers should remember that this Rs 1 lakh limit is not over and above the Rs 1 lakh limit available under Section 80C. In fact, the combined limit of investments made under Section 80C, 80CCD and section 80CCC (for investments made into pension plans of insurance companies) is Rs 1 lakh.

Select Your 6th CPC HRA% and Transport Allowance. Also select your city as per the recommendations of 7th CPC

Click the ‘Calculate’ button to get your revised 7th CPC Basic Pay, Matrix Level, Index Level, Revised amount of HRA, Revised amount of Travelling Allowance and the Total Revised Pay per month as per the recommendations of 7th Pay Commission.

Salient features of the clarification are listed below.

WHETHER IMPLEMENTATION OF THE CABINET DECISION ON 7TH CPC RECOMMENDATIONS WILL BE DELAYED FURTHER FOR FOUR MONTHS

The question of keeping in abeyance the implementation of the Cabinet decision on 29th June 2016 regarding 7thCPC recommendations, till the High Level Committee submits its report to Govt, was discussed in the NJCA meeting. It is decided that NJCA should not demand it, as the employees may be put to hardship, especially those who are in the verge of retirement. Com Shiv Gopal Misra, Convenor, NJCA has confirmed from the Finance Ministry that Govt notification on 7th CPC recommendations is under process and it will be issued shortly, payment may be made from August salary.

WHAT IS THE DIFFERENCE BETWEEN EMPOWERED COMMITTEE CONSTITUTED EARLIER AND THE NEW HIGH LEVEL COMMITTEE?

The new High Level Committee is the product of the discussion held by Group of Ministers including Home Minister, Finance Minister and Railway Minister with NJCA leaders after announcement of the Cabinet decision, in the wake of an impending indefinite strike. Govt is compelled to appoint the new Committee, as the decision taken by the Govt on the proposals submitted by the Empowered Committee headed by Cabinet Secretary (details of proposals of ECoS is not known to staff side) is not acceptable to the NJCA. Hence the new Committee shall be to reconsider the decision of the Govt. especially regarding minimum wage and fitment formula. Inspite of the assurance of the Groups of Ministers that the Committee is being constituted to reconsider the Govt. decision, if the Govt. again reject our demand, the NJCA have to reconsider its stand and deferred strike shall be revived.

POSITION REGARDING ALLOWANCES

All allowances including HRA, transport allowance, fixed medical allowance to pensioners etc. are referred to a committee headed by Finance Secretary. Committee shall submit its report within four months. Pending final decision based on the report of the Committee, all existing allowances to be paid as per the existing rates in existing pay structure. Govt. may try to deny arrears of revised rate of allowances by implementing it from prospective date as in the past. This issue will be further discussed by the NJCA with the proposed Committee.

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